Gas prices in Israel to reach all-time high at NIS 8.27 per liter amid worldwide price hikes

The price hike comes after gasoline prices worldwide jumped by approximately 13%, amid rising crude oil prices, continued concerns over disruptions to supply chains, and global energy vulnerability.

The price of gasoline in Israel will rise by 52 agorot per liter at midnight between Wednesday and Thursday, reaching an all-time high of NIS 8.27 per liter, equivalent to $10.17 per gallon, following a surge in the dollar exchange rate and global gasoline prices.

The increase will break the previous record of NIS 8.25 per liter.

The price hike comes after gasoline prices worldwide jumped by approximately 13%, amid rising crude oil prices, continued concerns over disruptions to supply chains, and the vulnerability of the global energy market.

At the same time, the US dollar strengthened by approximately 3% against the shekel, another factor contributing to the final increase in fuel prices in Israel.

The increase comes less than a month after Finance Minister Bezalel Smotrich intervened to prevent drivers from absorbing a sharp price hike of approximately 60 agorot per liter. After receiving the necessary approvals, Smotrich signed a temporary reduction in the fuel excise tax, bringing the price of gasoline down to NIS 7.75 per liter.

Smotrich's tax reduction to hold until end of October

The tax reduction is due to remain in effect through the end of October.

This time, however, the price increase is taking place while the tax reduction is still in effect. In other words, even after the state temporarily waived part of the excise tax, rising global oil prices have erased much of the savings passed on to drivers in less than a month.

Last month's excise tax reduction was intended not only to ease the burden on drivers, but also to moderate the impact of fuel prices on transportation, distribution, and shipping costs, which ultimately feed into the prices of goods and services.

Now, even before the tax reduction expires, gasoline prices are climbing again.

The increase also comes before the excise tax reduction signed by Smotrich is due to expire. The reduction is scheduled to remain in effect through October 31. If it is not extended, gasoline prices could rise again in November, depending on global oil prices and the dollar exchange rate.